Strange Image Uploading Issue in 2.6

Ok so when using the media uploader (image uploader on a post/page) I am able to upload the image, and the image’s information (like the title.jpg) is recorded on the following screen, but the actual image itself was never uploaded to the server. Also, it seems as though the uploads file in wp-content was not created either. I was initially building the site locally, and everything worked fine. Now as I migrate the site to a live server, this issue is occurring.

One thing I did was to change the file permissions of the wp-content folder, because prior to that it would give me an error when trying to upload. Any suggesstions?

Rich